Introductory Text

Companies Act 2006

2006 CHAPTER 46

An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about directors' disqualification, business names, auditors and actuaries; to amend Part 9 of the Enterprise Act 2002; and for connected purposes.

[8th November 2006]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Companies and Companies Acts

1 Companies

(1) In the Companies Acts, unless the context otherwise requires—

“company” means a company formed and registered under this Act, that is—
(a) a company so formed and registered after the commencement of this Part, or
(b) a company that immediately before the commencement of this Part—
(b) (i) was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6) ) , or
(ii) was an existing company for the purposes of that Act or that Order,
(which is to be treated on commencement as if formed and registered under this Act).
(2) Certain provisions of the Companies Acts apply to—

(a) companies registered, but not formed, under this Act (see Chapter 1 of Part 33) , and
(b) bodies incorporated in the United Kingdom but not registered under this Act (see Chapter 2 of that Part).
(3) For provisions applying to companies incorporated outside the United Kingdom, see Part 34 (overseas companies).

2 The Companies Acts

(1) In this Act “the Companies Acts” means—

(a) the company law provisions of this Act,
(b) Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) (community interest companies) , and
(c) the provisions of the Companies Act 1985 (c. 6) and the Companies Consolidation (Consequential Provisions) Act 1985 (c. 9) that remain in force.
(2) The company law provisions of this Act are—

(a) the provisions of Parts 1 to 39 of this Act, and
(b) the provisions of Parts 45 to 47 of this Act so far as they apply for the purposes of those Parts.
Annotations:

Types of company

3 Limited and unlimited companies

(1) A company is a “limited company” if the liability of its members is limited by its constitution.

It may be limited by shares or limited by guarantee.
(2) If their liability is limited to the amount, if any, unpaid on the shares held by them, the company is “limited by shares”.

(3) If their liability is limited to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up, the company is “limited by guarantee”.

(4) If there is no limit on the liability of its members, the company is an “unlimited company”.

4 Private and public companies

(1) A “private company” is any company that is not a public company.

(2) A “public company” is a company limited by shares or limited by guarantee and having a share capital—

(a) whose certificate of incorporation states that it is a public company, and
(b) in relation to which the requirements of this Act, or the former Companies Acts, as to registration or re-registration as a public company have been complied with on or after the relevant date.
(3) For the purposes of subsection (2) (b) the relevant date is—

(a) in relation to registration or re-registration in Great Britain, 22nd December 1980;
(b) in relation to registration or re-registration in Northern Ireland, 1st July 1983.
(4) For the two major differences between private and public companies, see Part 20.

5 Companies limited by guarantee and having share capital

(1) A company cannot be formed as, or become, a company limited by guarantee with a share capital.

(2) Provision to this effect has been in force—

(a) in Great Britain since 22nd December 1980, and
(b) in Northern Ireland since 1st July 1983.
(3) Any provision in the constitution of a company limited by guarantee that purports to divide the company's undertaking into shares or interests is a provision for a share capital.

This applies whether or not the nominal value or number of the shares or interests is specified by the provision.

6 Community interest companies

(1) In accordance with Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) —

(a) a company limited by shares or a company limited by guarantee and not having a share capital may be formed as or become a community interest company, and
(b) a company limited by guarantee and having a share capital may become a community interest company.
(2) The other provisions of the Companies Acts have effect subject to that Part.

General

7 Method of forming company

(1) A company is formed under this Act by one or more persons—

(a) subscribing their names to a memorandum of association (see section 8) , and
(b) complying with the requirements of this Act as to registration (see sections 9 to 13).
(2) A company may not be so formed for an unlawful purpose.

8 Memorandum of association

(1) A memorandum of association is a memorandum stating that the subscribers—

(a) wish to form a company under this Act, and
(b) agree to become members of the company and, in the case of a company that is to have a share capital, to take at least one share each.
(2) The memorandum must be in the prescribed form and must be authenticated by each subscriber.